PALO ALTO – Tesla plans to raise $1.15 billion to boost its bottom line and the anticipated rapid, new production of the Model 3.

The electric vehicle and renewable energy company has struggled to make a profit, even as it has quickly expanded its manufacturing operations and merged with SolarCity. The company is offering $250 million in common stock and $750 million in convertible senior notes. Underwriters have an option to purchase an additional 15 percent of each offering.

CEO Elon Musk will purchase $25 million in common stock, the company said.

Analysts have predicted Tesla would need an influx of cash to reach ambitious growth and production targets. The company intends to launch the Model 3, a sedan with a base price of $35,000, this year.

Efraim Levy, equity analyst at CFRA Research, said the offering “is on the lower end of our expectations.”

Levy said the company was taking advantage of a strong stock price and structured the deal to reduce dilution of value for existing stockholders. The company will likely have to raise more cash, but maybe not this year, he said.

Musk has a proven track record and the backing of enthusiastic shareholders, although Levy noted the tech mogul has rarely delivered on time.

Still, he said, shareholder support means Musk “has the time to make it work.”

Ben Kallo, senior analyst with Baird Equity Research, said the relatively small size of the deal shows Tesla’s confidence in Model 3 production and sales. Kallo expects the cash to help expansion at the Tesla plant and Gigafactory battery facility in Nevada.

Tesla shares closed at $255 on Wednesday, then jumped 2 percent in after-hours trading when the deal was announced.

Musk remains committed to aggressive company growth.

Tesla submitted plans to expand its Fremont factory and bump production from about 80,000 vehicles a year to a half-million cars and SUVs in 2018. The company has started some work on the plant, according to public permits.

Nearly 400,000 prospective Model 3 owners placed $1,000 reservations for the sedan in the weeks following its unveiling. Tesla expects to start manufacturing the new model in July.

Louis Hansen covers Tesla and renewable energy for the Bay Area News Group and is based at The Mercury News. He's won national awards for his investigations and feature stories. Prior to joining the organization, he was an enterprise reporter at The Virginian-Pilot, where he covered state government, the military and criminal justice.

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